The property currently has eight (8) units on site, four (4) Park Owned Homes and four (4) Tenant Owned Homes.
New owners would have the option to sell the Park Owned Homes on contract, which offers a larger short term return while gradually raising lot rents to market rates.
Lot Rent
Currently lot rent is set at $235 per month, and Park Owned Homes are renting for an additional $215-$240.
Current lot rent is well below the market average of $275-$325 for similar properties, offering new ownership realistic and attainable upside by raising lot rents, and infilling vacant pads.
POHs are currently rented below market value, offering additional short term capitalization.
Utilities
The park is served by public utilities, all of which are directly billed to the tenants.
Ownership is currently responsible for mowing of the common areas, and snow removal. Current ownership has an on site manager that is paid $100 per mowing, and $50 for snow removal as needed.
Number of Usable Lots
Commercial Parcels: 0827382001 and 0834129017.
0827382001: Public record indicates zoning for up to 15 lots, although recent fire code changes may restrict the infill and number of usable lots on this parcel.
0834129017: This abutting parcel included in the sale is approximately 0.27 acre. This area is not included in the lot count however, the parcel could accommodate 2-3 units.
New ownership should budget for 10-12 usable lots rather than the 15 lots shown on public records.
Pro Forma Lot Rent
Current performance is based off actuals and is reflected in the current NOI throughout the offering memorandum.
PRO FORMA
8 units occupied (4 POH and 4 TOH) with a lot rent rate of $275 results in a NOI of approximately $31,800.
10 units occupied (4 POH and 6 TOH) with a lot rent rate of $275 results in a NOI of approximately $38,200.
*assumes 5% management fee.
*assumes POH rate at $458 including lot rent.
Financial Analysis
Financial analysis is based off of the sale of the four homes on contract for a 5 year, interest free note of $800 per month. Pro Forma Year 2 assumes $275 lot rent. Lot rents were raised $25 annually over a 5 year period, and then increased at a rate of 5% per year for the remainder. Numbers exclude infill potential.
Wapello, IA
Wapello is the county seat of Louisa county. The city has a population of roughly 2,000 inhabitants, with a county population of 11,000.
Wapello is located on HWY 61 which offers a direct commute to the Muscatine and Burlington, IA metros. Wapello is also located near Columbus Junction, which is home to a large Tyson Foods Inc. packing plant. The packing plant is currently expanding and adding a third shift, which has caused an increase in the demand for affordable housing in the area.
Pawa MHC
The subject property is located on HWY 61, offering an easy commute and central location for tenants. The park features minimal roads, and has no thru traffic due to the road design. This offers low overhead and ease of maintenance for new ownership.
